March 27, 2024
Crypto Market Surges as SEC Greenlights 11 Spot Bitcoin ETFs,
Bitcoin News

Spot Bitcoin ETF Approval Boosts Crypto market to $1.76 Trillion

After a wait of nearly a decade, the United States Securities and Exchange Commission approved the first-ever spot Bitcoin ETF on January 10, with ETF trading commencing less than 24 hours later at the opening bell. Various Bitcoin trusts, including BlackRock’s iShares Bitcoin Trust (IBIT), Grayscale Bitcoin Trust (GBTC), Valkyrie Bitcoin Fund (BRRR), Bitwise (BITB), and ARK 21Shares Bitcoin ETF, have initiated trading.

The initial hours of trading witnessed substantial trading volume. Bloomberg Bitcoin ETF analysts shared a similar observation, stating, “Wow, only 20 minutes into trading and the volume is big with half a billion traded for the group (ex GBTC too, outpacing $BITO by a lot), led by $IBIT (which is nearing lock to pass $1b) and $FBTC. It is important to note that almost all the volume in the first few days will convert to inflows.”

During early trading, the Grayscale Bitcoin Trust saw an almost 6% increase, while the iShares Bitcoin Trust surged over 4%. At the time of writing, GBTC held the largest share of the group, accounting for 40% of the total volume, surpassing the $1 billion mark within the first two hours of trading. The Grayscale Fund underwent conversion from an over-the-counter trust with over $28 billion in assets.

The Hashdex fund represents a strategy change from an existing Bitcoin futures ETF, although this change had not yet taken effect as of Thursday morning, according to SEC filings.

The regulatory approval included 11 spot Bitcoin ETFs, opening avenues for investments in the world’s largest cryptocurrency by market capitalization without the direct risk of holding the digital token. As spot Bitcoin ETFs entered the market, cryptocurrency prices saw an uptick, with Bitcoin surging more than 2.7% on the day, as per CoinMarketCap data. At one point, major cryptocurrencies rose above $49,000 before undergoing a correction to the current price.

The total cryptocurrency market capitalization stands at $1.76 trillion, reflecting a 3.57% increase over the last 24 hours. Market participants will closely monitor the performance of Bitcoin ETFs, not only in terms of their individual success but also in relation to the price movements of BTC.

A sustained negative correlation between the fund’s price and the underlying assets lasting several days could indicate thin trading or structural issues with the ETF. Such a scenario might deter potential buyers, even if the fund is temporarily outperforming spot Bitcoin.

Image by freepik

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